Allient
A maker of small custom motors for robots, cars and weapons that also sells filters to clean the electrical noise data centres create.
Our viewUnattractive Medium conviction
The scores
The profile · 1-4
Growth2/4 ↑
Trailing revenue still sits below 2023 and Vehicle has fallen 27% since. Not 3: the 9.3% organic quarter is two quarters old.
Business quality2/4 ↑
Design-in raises the cost of leaving. Not 3: its own 10-K calls the market fragmented with larger rivals, and no year cleared 7.9% operating margin.
Financial position3/4 ↑
Net debt of $131M, nothing due before March 2029, wide covenant headroom. Not 4: real debt rather than net cash, and cash conversion fell.
Execution record3/4 ↑
The stated cost savings, the margin and the deleveraging all landed. Not 4: the Dothan transfer is still incomplete a year on.
Per share capture2/4 ↑
Split-restated, the count rose 19% since 2018, taking half the earnings growth. Not 3: stock paid a quarter of deals. Not 1: 2.8% lately.
Potential2/4 ↑
The data-centre line is real and entirely uncontracted: no volume, no term, a twenty-fold range on content per megawatt, and somebody else's spending decision.
Risk profile3/4 →
Customers and end markets are genuinely diversified. Not 4: one man holds all three top roles, and plants sit in Mexico and China under tariffs.
Valuation2/4 ↓
About $43 for each dollar of operating profit assumes the plan works and more. Not 1: that margin has been earned, for one quarter.
Evidence quality3/4 →
The statements are filed and checked against the filer's own tags. Not 4: the data-centre figure carrying the whole story exists only on a call.
The bet · 2-3 years
Priced for success0.6×
If it works 0.6× · if it fails you keep about 35%.
The Verdict
We rate Allient unattractive. It builds small precision motors into other companies' machines and also makes filters that clean the electricity data centres use; the motors face bigger rivals and earn thin margins, so the business is mixed. The data-centre line is growing fast but is only about a tenth of sales, and the price treats the whole company as if it grew like that part, so it is full, not cheap. As a bet on that line and its new drone parts it is priced for success: even strong growth leaves the shares worth about half of today, and if it stalls shareholders keep about a third.
The long caseData centres add electronics that dirty the grid's power, and Allient's filters clean it, so the line could grow far larger than the motors.
The evidence under this - 8 claims
C18management claimmedium confidence
Management says sales tied to data centre and infrastructure applications were $16.3M in Q2 2026, 10.6% of revenue and up 60% year on year, and $57.1M over the trailing twelve months, 9.9% of sales and up 69%.
against this
- The figure has no filed home. Allient reports one segment and splits revenue four ways; the data centre line appears in neither the 10-Q nor the 10-K, so it cannot be reconciled to anything audited.
- It was disclosed for the first time on this call, in the quarter it was strongest, and the chief financial officer had to look the growth rate up when an analyst asked him to repeat it.
- Industrial revenue as filed grew 16.8% in the quarter, so a 60% growth rate on a tenth of sales implies the rest of Industrial grew about 12% - consistent, but the split itself is unaudited.
C02facthigh confidence
The power-quality and transformer line sits in two Wisconsin subsidiaries, TCI, LLC and SNC Manufacturing Co., Inc.; SNC was bought on 11 January 2024.
C41facthigh confidence
The shares closed at $116.01 on 25 September 2026, up 160.9% over the preceding 252 trading days and 2.2% below the 252-day high of $118.67.
- 2026-09-27editedre-struck on the refreshed pack's 2026-09-25 close; the earlier text dated the $98.66 close to 12 September, a Saturday, when it was the 11 September close
C40estimatehigh confidence
At $116.01 the enterprise is worth about $2.10B against $48.5M of operating profit over the four quarters to 30 June 2026 - about $43 for each dollar. For that to be $20, operating profit must reach about $105M, which at Q2 2026's 10.2% operating margin needs roughly $1,031M of revenue, 79% above the last twelve months and 78% above the best year the company has ever sold.
derivedMarket capitalisation of $1,971.8M from the research pack's market tier at the 25 September 2026 close, plus net debt of $131.2M from the Q2 2026 balance sheet (C36), gives $2,103.0M. Operating income of $15,610K, $9,321K, $11,349K and $12,180K for the four quarters to 30 June 2026 (C27, C31) gives $48,460K. $2,103.0M over 20 is $105.1M; $105.1M at 10.2% is $1,031M; trailing revenue is $574.8M and the best full year was $578.6M in 2023 (C30). At the $98.66 the thesis was struck at the same arithmetic gave $1,808.1M, about $37 a dollar and $886M of revenue.
against this
- Trailing operating profit includes two weak quarters. On the Q2 2026 quarter annualised - $62.4M - the same enterprise value is about $34 for each dollar, and the backlog says the next two quarters should be larger still.
- $20 for each dollar of operating profit is a choice, not a law. A business genuinely compounding at a decade-high margin could reasonably hold a higher one, and Allient's own six-year median enterprise value to cash profit is about 13 times against 27 today - the re-rating has already happened once.
- The amortisation of acquired intangibles, $12.5M a year, is charged in this operating profit and added back in the company's own adjusted figures; excluding it the multiple falls to about $34 for each dollar.
- 2026-09-27editedre-struck on the 2026-09-25 close of $116.01 from the refreshed pack after a 17.6% rise since the price was struck; operating profit, net debt and the $20 reference are unchanged
C05facthigh confidence
Allient reports one reportable segment and discloses revenue only by target market and by geography, so no product line has a filed revenue figure of its own.
C31facthigh confidence
Operating income was $44.0M in FY2025, 7.9% of revenue, against $30.0M and 5.7% in FY2024; across FY2016 to FY2025 the filer's own tags put every full-year operating margin between 5.7% and 7.9%.
sourceAllient Form 10-K for the year ended December 31, 2025primaryAllient company-concept data from the SEC XBRL API - diluted…primary
against this
- The research pack's vendor tier reports FY2025 operating income of $48.0M against the filed $44.0M, a 9.2% gap; the filed figure is used here and the divergence is recorded in the data notes.
- The ten-year window starts in 2016. Operating income in 2014 was $24.2M and the tag series carries no revenue figure that far back, so a higher margin before 2016 cannot be ruled out from these tags alone - which is why management's own 'highest in roughly a decade' is recorded separately as a claim.
C68estimatelow confidence
Taking data-centre and infrastructure sales of $57.1M at Q2 2026's 10.2% operating margin, about $5.8M of the $48.5M of trailing operating profit, the rest of Allient earns about $42.7M.
sourceAllient Form 10-Q for the quarter ended June 30, 2026primaryAllient second quarter fiscal 2026 earnings call transcriptprimary
against this
The data-centre line's margin is not disclosed; power-quality products may earn more or less than the company average.
C71estimatelow confidence
The bet counts about $10M a year of drone and counter-drone sales by 2028, a stated judgement: about 2% of the roughly $500M a year the Pentagon's drone programme alone plans to spend on finished drones.
sourceDefenseScoop, 2 December 2025: the Pentagon's Drone…secondaryAllient second quarter fiscal 2026 earnings call transcriptprimary
against this
- Management says the line is not a major revenue driver today and discloses no order (C55).
- The chief executive concedes that a number of companies already supply off-the-shelf drone propulsion products (C69).
The company
Allient builds motors to a customer's exact torque and size, with the drives, gears and sensors that go with them. They sit inside surgical robots, power steering, munition guidance and wafer-handling machines. Industrial customers bought $268.4M of FY2025's $554.5M of sales.
Two Wisconsin plants make something different: filters that clean the distorted electricity a building's electronics create, so it stays inside the limit set where it meets the grid. The company reports one segment, so neither business has a filed sales figure of its own.
The evidence under this - 5 claims
C01facthigh confidence
Allient designs and makes precision controlled-motion hardware - brush and brushless direct-current motors, torque and coreless motors, integrated motor-drives, gearmotors, optical encoders, digital servo drives and motion controllers - and, separately, electrical power-quality hardware: active and passive harmonic filters, line reactors and transformers.
sourceAllient Form 10-K for the year ended December 31, 2025primaryAllient Form 10-Q for the quarter ended June 30, 2026primary
- 2026-09-29editedre-sourced to the Q2 2026 10-Q, which restates the same product list; as_of moves to 30 June 2026 and the sentence is unchanged
C02facthigh confidence
The power-quality and transformer line sits in two Wisconsin subsidiaries, TCI, LLC and SNC Manufacturing Co., Inc.; SNC was bought on 11 January 2024.
C03facthigh confidence
The power-quality product exists to bring a facility inside the steady-state voltage and current distortion limits IEEE 519-2022 sets at the point where it connects to the utility.
C04facthigh confidence
In FY2025 Industrial was $268.4M of $554.5M of revenue, Vehicle $97.0M, Medical $81.7M, Aerospace & Defense $81.3M and Distribution and Other $26.0M.
C05facthigh confidence
Allient reports one reportable segment and discloses revenue only by target market and by geography, so no product line has a filed revenue figure of its own.
How it makes money
It sells hardware against orders placed months ahead: only 20% to 25% of a quarter's sales are both ordered and shipped inside it. No customer was more than 10% of sales in 2025. What the price is paying for is the data-centre line: $57.1M over the last twelve months, 9.9% of sales, a figure management gave on a call.
The evidence under this - 3 claims
C25management claimmedium confidence
Management says about 20% to 25% of any quarter's revenue is booked and shipped inside the quarter, with the rest coming out of backlog.
C10facthigh confidence
No customer exceeded 10% of total sales in 2025 or 2024; in 2023 one customer was 10% of revenues and another 12%.
C18management claimmedium confidence
Management says sales tied to data centre and infrastructure applications were $16.3M in Q2 2026, 10.6% of revenue and up 60% year on year, and $57.1M over the trailing twelve months, 9.9% of sales and up 69%.
against this
- The figure has no filed home. Allient reports one segment and splits revenue four ways; the data centre line appears in neither the 10-Q nor the 10-K, so it cannot be reconciled to anything audited.
- It was disclosed for the first time on this call, in the quarter it was strongest, and the chief financial officer had to look the growth rate up when an analyst asked him to repeat it.
- Industrial revenue as filed grew 16.8% in the quarter, so a 60% growth rate on a tenth of sales implies the rest of Industrial grew about 12% - consistent, but the split itself is unaudited.
Where the money comes from, stream by stream
| Stream | Share of sales (six months to June 2026) | How it earns it |
|---|---|---|
| Industrial | 49.2% | Motors, drives and controls for automation, plus power-quality filters and transformers, including the data-centre line management puts near a tenth of sales. |
| Vehicle | 16.9% | Motors and controls built into trucks, buses, power sports and other vehicle makers' platforms, sold under multi-year programmes. |
| Aerospace & Defense | 15.3% | Precision motion and composite parts for weapons, aircraft and defence systems, sold to prime contractors. |
| Medical | 14.1% | Motors and motion parts designed into surgical, imaging and patient-handling equipment, where a change needs requalification. |
| Distribution and Other | 4.5% | Standard products sold through distributors and other channels outside the four target markets. |
Who runs it
Richard Warzala has run Allient since 2009 and chairs its board; he built it by buying smaller motor makers. Insiders own about 15%, most of it his. His yearly bonus rides on profit after a charge for the money tied up, his long-term shares on profit and on sales growth, which a purchase can help. His son is one of the officers, and nothing pays on earnings per share.
The evidence under this - 3 claims
C65facthigh confidence
Richard Warzala, 72, joined in 2002 as president and chief operating officer, has been chief executive since May 2009 and chairman since February 2014; James Michaud became chief financial officer in May 2024; Ashish Bendre has run TCI, the power-quality maker, since 2015 and the Orion group since July 2020; the chief executive's son Stephen Warzala is chief growth officer and has run the Defense unit since December 2024.
C63facthigh confidence
At 11 March 2026 directors, nominees and executive officers as a group beneficially owned 2,626,046 shares, 15.0% as the proxy prints it; Richard Warzala held 1,730,930, 10.2%, the largest insider. The ESOP held 522,511 shares, 3.1%, over which he is a trustee. FMR at 14.3% and BlackRock at 5.9% were the other holders above 5%. There is one class of common stock.
against this
- Warzala sold 70,000 shares and gave away 10,000 in August 2026 (C46), so his stake is now nearer 8.8%.
- The printed group figure counts the ESOP's shares through the trustee role, and 112,801 family-trust shares sit in both Warzalas' rows; directors and officers' own holdings are nearer 12%.
C64facthigh confidence
Allient's annual cash bonus pays on Economic Value Added, net operating profit after tax less a capital charge; its annual performance shares on adjusted EBITDA against 95% to 105% of the prior three years' average; and its multi-year XSIP on revenue growth, 33.3% over the four years to 2027 at target. The chief executive's 2025 bonus was $1,615,232 against a target of 125% of a $740,000 salary; no bonus was paid for 2024 and no XSIP shares were earned for 2025.
against this
- The EVA bonus charges for capital, which rewards return on it rather than size, and paid nothing in 2024 when revenue fell.
- The XSIP revenue goal is adjusted only for acquired revenue already rewarded, so a share-funded deal can still move revenue toward target, and the performance-share bar is the company's own recent average.
Why it wins, and who could beat it
Why customers come back
A motor like this is tested inside the customer's machine. In a surgical robot a change that could affect safety means a new FDA filing, a $28,653 fee and 90 days before the device ships, so the customer pays to leave. Read backwards, every new design is competed from scratch in what Allient calls a fragmented market.
It barely shows in the numbers. Return on the money invested is about 8.6%, and even the record 34.9% gross margin trails the 37.8% Regal Rexnord's motion business earned.
The evidence under this - 4 claims
C57facthigh confidence
A federal rule requires a new premarket notification at least 90 days before shipping a cleared medical device significantly changed in design, components or manufacture; the FDA fee for one is $28,653 from 1 October 2026.
sourceElectronic Code of Federal Regulations, 21 CFR 807.81 - when…primaryFDA notice - Medical Device User Fee Rates for Fiscal Year…primary
against this
- The rule turns on 'significantly': a replacement motor the device maker's own testing shows does not affect safety or effectiveness is documented internally without a filing, so the fee and the 90 days bound the cost of leaving rather than being a toll every switch pays.
- It reaches only Medical - $81.7M, 15% of FY2025 sales. The industrial and vehicle customers who are most of the book face no regulator pricing a change of motor supplier.
C06facthigh confidence
Allient's own 10-K says the controlled motion market is highly fragmented with many competitors, some of which are substantially larger and have greater resources than Allient, and names Ametek, Parker Hannifin and Regal Rexnord.
C08factmedium confidence
Allient's record gross margin of 34.9% in Q2 2026 is below the 37.8% Regal Rexnord's Automation & Motion Control segment earned across the whole of 2025.
sourceAllient Form 10-Q for the quarter ended June 30, 2026primaryRegal Rexnord Corporation Form 10-K for the year ended…primary
against this
- The two are not struck on the same perimeter: Allient's is the whole company including a lower-margin transformer and reactor line, while Regal Rexnord's is one of three segments and excludes its powertrain and power-efficiency businesses.
- Allient's own gross margin has risen 150 basis points in FY2025 and 170 in Q2 2026 while Regal Rexnord's segment margin fell from 39.3% to 37.8% - the gap is closing.
C09estimatemedium confidence
Return on invested capital over the four quarters to 30 June 2026 was about 8.6%: $48.5M of operating profit taxed at 21% over $443.5M of equity plus debt less cash.
derivedOperating income of $15,610K, $9,321K, $11,349K and $12,180K for the four quarters to 30 June 2026 from the Q2 2026 10-Q and the FY2025 10-K; stockholders' equity $312,294K, total debt $173,337K and cash $42,088K at 30 June 2026; a 21% rate, the bottom of the company's own 21% to 23% full-year expectation. The research pack's own trailing figure, computed differently, is 7.5%.
against this
- It is struck on a capital base carrying $214.6M of goodwill and other intangibles at cost less amortisation, so it charges the company for acquisitions made at prices set years ago; on tangible capital alone the return is far higher.
- It uses trailing profit at the bottom of a margin recovery. On the Q2 2026 quarter annualised the same calculation gives about 11%.
The threat
The filter is the exposed product. Eaton lists power-quality equipment in both of its electrical businesses, so a data-centre buyer takes the filter from the same supplier as the switchgear, and Allient's is never quoted on its own. In motors, Regal Rexnord's motion business alone sold $1.69B in 2025.
The evidence under this - 3 claims
C11facthigh confidence
Eaton's FY2025 10-K carries 'single phase and three phase power quality' as a named product line in both its Electrical Americas and its Electrical Global segments.
C12facthigh confidence
Regal Rexnord's Automation & Motion Control segment sells precision motion control solutions, high-efficiency miniature servo motors, controls, drives and linear actuators, and reported net sales of $1,689.8M in 2025 against $5,934.5M consolidated.
C15inferencemedium confidence
There is no concentrated buyer positioned to bring Allient's products in-house, because no customer is large enough; the substitution risk runs instead through the electrical equipment makers who specify a data centre's power package and already sell the same filter.
derivedAllient's own concentration disclosure - no customer above 10% of sales in 2025 or 2024 (C10) - against Eaton's own filing carrying three phase power quality as a product line in two segments (C11).
against this
- Management said on the Q2 2026 call that 'some of the majors' have visited Allient's facilities and assessed its capacity, which implies the buyer at the top of this market is a large operator whose future behaviour the concentration disclosure cannot describe.
- A customer below 10% of Allient's $554.5M of sales can still be a very large company for whom vertical integration is cheap.
The rivals: ETN, RRX, AME, PH, and 1 more that is private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| ETN | Eaton plcPriced against it: Small part of it | Data centre power quality and drone products | On sale | Small part of it |
| RRX | Regal Rexnord's Automation & Motion Control segmentPriced against it: Same product | Controlled motion | On sale | Same product |
| AME | AMETEK's Electromechanical GroupPriced against it: Small part of it | Controlled motion | On sale | Small part of it |
| PH | Parker-Hannifin's Diversified Industrial SegmentPriced against it: Small part of it | Controlled motion | On sale | Small part of it |
| Not listed | Other suppliers of off-the-shelf drone propulsion motors and electronicsPriced against it: Not listed | Data centre power quality and drone products | On sale | Not listed |
How big it could get
How big this could get
The market is counted in megawatts of data-centre power that needs cleaning where it meets the grid. In April 2026 Texas's grid operator was tracking about 410 gigawatts of large users waiting to connect, 87% of them data centres. But a queue is not a build, and Allient's own content runs from about $2,000 to over $40,000 a megawatt, so nobody can size it.
The evidence under this - 2 claims
C16factmedium confidence
ERCOT told the Texas Senate Committee on Business & Commerce on 1 April 2026 that it was tracking approximately 410 gigawatts of large loads seeking interconnection, about 87% of them data centres.
against this
- A queue is an application, not a build. ERCOT has contracted consultants and moved to a batch connection process precisely because the queue contains far more than will connect, and its own later materials show the figure still rising while nothing like it is energised.
- It covers one grid region. Nothing in it says what share of a connected megawatt's electrical package Allient could ever supply.
C17management claimlow confidence
Management says Allient's content is about a couple of thousand dollars per megawatt where only a line reactor is supplied, and over $40,000 per megawatt for a complete solution including communications gateways, filters and reactors.
against this
- The range spans twenty-fold and the chief executive set it himself while declining to give a forecast, saying 'I'm not going to give you what I believe the forecast is'. A factor of twenty is not a price, it is a refusal to name one.
- No independent party publishes power-quality equipment content per megawatt, so the figure cannot be checked against anything.
Who has signed
Backlog was $298.0M at 30 June 2026, up 26% in a year, after a record $201.3M of orders in the quarter. None of it names a customer or a term, and the annual report itself says the backlog is not a reliable guide to future sales.
The evidence under this - 3 claims
C21facthigh confidence
Backlog was $298.0M at 30 June 2026, up 26% from $236.6M a year earlier and up from $232.9M at the end of 2025.
C22facthigh confidence
Bookings were a record $201.3M in Q2 2026, up 49% year on year and 27% sequentially, a book-to-bill ratio of 1.31 times.
sourceAllient Form 10-Q for the quarter ended June 30, 2026primaryAllient second quarter fiscal 2026 earnings call transcriptprimary
against this
- Management changed how bookings are recorded during 2026, booking large blanket orders into backlog only when they fall within a year and are released to production, so the 49% is not struck against an identically defined base and the company did not restate.
- Management said on the same call that lead times have expanded and that customers are placing orders roughly three months earlier than before, which moves orders forward in time without adding demand.
- The FY2025 10-K says the company does not believe the amount of its backlog is a reliable indication of future sales.
C23facthigh confidence
The FY2025 10-K says the majority of backlog converts to sales in approximately three to nine months and that, given short product lead times, Allient does not believe the amount of its backlog is a reliable indication of future sales.
The results
The numbers
Is it growing?Steady
Sales grew 11% over the twelve months to Jun 2026, faster than the 4.6% in the year to Dec 2025.
Is it profitable?Thin
Operating margin is 8.4%, about where it was (7.3%) in the year to Dec 2023.
Does growth pay off?Flat
Running costs take 25¢ of each sales dollar, up from 24¢ in the year to Dec 2021.
Does it earn good returns?Low
Each dollar put into the business earns 7.7% a year after tax, about where it was (8.5%) in the year to Dec 2021.
Is it making cash?Thin
It turned 4.8% of sales into free cash, $27.5M over the last twelve months.
Is the balance sheet safe?Heavy debt
It owes $131M more than the cash it holds, about 3.4 years of the cash its operations bring in.
Are shares being diluted?Diluting
The share count rose 16% in 4.5 years, and pay in shares costs 0.6% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-04. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Jun 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $404M | $503M | $579M | $530M | $554M | $575M |
| Sales growth | +10% | +25% | +15% | −8.4% | +4.6% | +11% |
| Profit | ||||||
| Gross margin | 30% | 31% | 32% | 31% | 33% | 33% |
| Operating margin | 6.4% | 6.3% | 7.3% | 5.7% | 7.9% | 8.4% |
| Net margin | 6.0% | 3.5% | 4.2% | 2.5% | 4.0% | 5.0% |
| What growth costs, per sales dollar | ||||||
| Sales and marketing | 4.3% | 4.3% | 4.3% | 4.8% | 4.4% | 4.7% |
| General and admin | 11% | 10% | 10% | 11% | 10% | 11% |
| Pay in shares | 1.0% | 1.0% | 0.9% | 0.8% | 0.6% | 0.6% |
| Capital spending | 3.4% | 3.2% | 2.0% | 1.8% | 1.3% | 1.9% |
| Cash | ||||||
| Cash from operations | $25.4M | $5.60M | $45.0M | $41.9M | $56.7M | $38.4M |
| Free cash flow | $11.7M | −$10.3M | $33.4M | $32.2M | $49.7M | $27.5M |
| Balance sheet | ||||||
| Cash and short-term investments | $22.5M | $30.6M | $31.9M | $36.1M | $40.7M | $42.1M |
| Debt | $159M | $235M | $218M | $224M | $180M | $173M |
| Net cash | −$136M | −$205M | −$187M | −$188M | −$140M | −$131M |
| Returns and shares | ||||||
| Return on capital | 8.5% | 5.8% | 7.5% | 4.9% | 6.9% | 7.7% |
| Shares (diluted) | 14.5M | 16.0M | 16.3M | 16.6M | 16.7M | 16.9M |
What growth costs
Growing has not made Allient much more profitable: selling, office and engineering costs rise in step with sales, and when sales fell in 2024 they did not shrink. The better margin came from cheaper production and less spending on plants, and that held in the last quarter too.
The evidence under this - 3 claims
C67facthigh confidence
Per sales dollar, selling cost 4.2 cents in 2020 and 4.4 in 2025, general and administrative 10.4 and 10.4, and engineering and development 7.0 and 7.0 - together 21.6 and 21.9 cents while revenue rose 51%; capital spending fell from 2.6 to 1.3 cents and stock pay from 1.0 to 0.6. Gross margin rose from 29.6% to 32.8% and operating margin from 6.3% to 7.9%. In Q2 2026 the three lines were 22.2 cents against 21.8 a year earlier.
sourceAllient numbers card, content/ALNT/financials.json - the…primaryAllient (then Allied Motion Technologies) Form 10-K for the…primaryAllient Form 10-K for the year ended December 31, 2025primaryAllient Form 10-Q for the quarter ended June 30, 2026primary
against this
- In 2024, when revenue fell 8.4%, the three cost lines rose to 22.8 cents and operating margin fell to 5.7%, so the costs do not flex down with sales.
- Q2 2026's 10.2% operating margin (C27) shows a margin can still widen without operating leverage, through gross margin, which rose to a record 34.9%.
C31facthigh confidence
Operating income was $44.0M in FY2025, 7.9% of revenue, against $30.0M and 5.7% in FY2024; across FY2016 to FY2025 the filer's own tags put every full-year operating margin between 5.7% and 7.9%.
sourceAllient Form 10-K for the year ended December 31, 2025primaryAllient company-concept data from the SEC XBRL API - diluted…primary
against this
- The research pack's vendor tier reports FY2025 operating income of $48.0M against the filed $44.0M, a 9.2% gap; the filed figure is used here and the divergence is recorded in the data notes.
- The ten-year window starts in 2016. Operating income in 2014 was $24.2M and the tag series carries no revenue figure that far back, so a higher margin before 2016 cannot be ruled out from these tags alone - which is why management's own 'highest in roughly a decade' is recorded separately as a claim.
C27facthigh confidence
Q2 2026 revenue was $153.8M, up 10.2% and 9.3% organically; gross margin was a record 34.9%; operating income was $15.6M, or 10.2% of revenue, against 8.4% a year earlier.
The last report (5 Aug)
Quarter ended June 2026, filed figures.
10%
Sales growth
against the same quarter a year earlier
10.7%
Growth from the quarter before
against -3.1% the quarter before that
10¢
Operating profit
per dollar of sales
The second quarter of 2026 looked like a breakout. Sales grew 10.2%, 9.3% without acquisitions; gross margin was a record 34.9%; and 10.2 cents of every sales dollar was operating profit, against 8.4 a year earlier. The shares rose 19.3% the next day.
The cash went the other way. In the first half free cash flow fell 63% to $13.1M while net income rose 72%, because stock on the shelves and unpaid customer bills absorbed the growth.
What it did to the thesisIt showed the margin improvement the bulls point to is real. It also fed the doubt behind the Unattractive view: cash fell sharply while profit rose, because inventory and unpaid bills absorbed the growth. That raises the question of whether the orders were lasting demand or customers buying early.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $0.80 against $0.61 expected; $0.61 as filed, the gap being what the company adds back.
The evidence under this - 4 claims
C27facthigh confidence
Q2 2026 revenue was $153.8M, up 10.2% and 9.3% organically; gross margin was a record 34.9%; operating income was $15.6M, or 10.2% of revenue, against 8.4% a year earlier.
C45facthigh confidence
The shares rose 19.3% in the session after the Q2 2026 results release of 5 August 2026.
C28facthigh confidence
Operating cash flow in the six months to 30 June 2026 was $20.1M against $38.4M a year earlier, while capital spending rose to $7.1M from $3.2M - free cash flow of $13.1M against $35.2M, a fall of 63%, in a half when net income rose 72%.
against this
- The company attributes it to receivables timing and to deliberate inventory investment and strategic buys of critical materials ahead of tariffs, and reports inventory turnover of 3.1 times against 3.2 for the whole of 2025 - a small deterioration, not a collapse.
- Payables rose $14.1M over the same six months, so part of the working-capital movement went the other way and the net receivables and inventory build was about $19.8M.
- The prior-year half was unusually strong: $38.4M of operating cash flow on $9.2M of net income is a working-capital release, not a run rate.
C29facthigh confidence
Inventories rose to $117.9M from $109.2M and trade receivables to $99.8M from $88.8M in the six months to 30 June 2026, while accounts payable rose to $42.6M from $28.4M.
What management did with the money
Seven years of acquisitions grew sales 78.5%, and shares issued along the way grew the count 19%, so earnings per share rose only 16.5% while profit rose 38.4%. Net debt has come down, to $131.2M from $188.1M at the end of 2024.
Insiders in 2026Q2: 6 purchases and 8 sales, from their Form 4 filings.
The evidence under this - 3 claims
C33facthigh confidence
Diluted weighted-average shares rose from 14,055 thousand in 2018, restated for the 3-for-2 split of April 2021 (9,370 thousand as filed), to 16,732 thousand in 2025, a rise of 19.0%, while revenue rose from $310.6M to $554.5M, a rise of 78.5%.
sourceAllient company-concept data from the SEC XBRL API - diluted…primaryAllient (then Allied Motion Technologies) Form 10-K for the…primary
- 2026-10-04editedThe 2018 share count and earnings per share were the pre-split figures as filed; Allient paid a 3-for-2 stock split in April 2021 (FY2020 10-K, subsequent-event note, S22), so 2018 restates to 14,055 thousand diluted shares and $1.13. The rise to 2025 is 19.0%, not 78.6%.
C35facthigh confidence
Diluted earnings per share were $1.70 in 2018 as filed, $1.13 restated for the April 2021 3-for-2 split, and $1.32 in 2025 - a rise of 16.5% while net income rose 38.4%, from $15.9M to $22.0M.
sourceAllient company-concept data from the SEC XBRL API - diluted…primaryAllient (then Allied Motion Technologies) Form 10-K for the…primary
- 2026-10-04editedThe claim compared a pre-split 2018 figure with a post-split 2025 one; restated for the April 2021 3-for-2 split (S22) earnings per share rose 16.5%, not fell. Net income from the filed income statements added for scale.
C36facthigh confidence
Total debt was $173.3M and cash $42.1M at 30 June 2026 - net debt of $131.2M, down from $188.1M at the end of 2024; the revolving facility matures 1 March 2029 and the Series A senior notes on 21 March 2031 at 5.960%.
The price, and where we disagree
In short. Full. The price pays for a data-centre company. Allient is a motor maker with a data-centre line a tenth of its size.
Share price
$116.01
close,
Price for each $1 of yearly profit
67.8
its 6-year normal 30.6
Company value for each $1 of cash profit
26.7
its 6-year normal 13.2
The shares are up 161% in a year and all five analysts who cover them say Buy. Five days after the June-quarter results, the chief executive sold 70,000 shares with no pre-arranged plan on the form.
The test comes on 4 November. Allient gives no guidance, so the backlog is the only promise, and the September quarter is where it turns into sales at the new margin or does not.
The evidence under this - 5 claims
C41facthigh confidence
The shares closed at $116.01 on 25 September 2026, up 160.9% over the preceding 252 trading days and 2.2% below the 252-day high of $118.67.
- 2026-09-27editedre-struck on the refreshed pack's 2026-09-25 close; the earlier text dated the $98.66 close to 12 September, a Saturday, when it was the 11 September close
C42factmedium confidence
All five analysts covering Allient rate the shares Buy; none rates them Hold or Sell.
C46facthigh confidence
Richard Warzala, chairman, president and chief executive, sold 70,000 shares on 10 August 2026 at $112.81 to $115.35 under transaction code S with no Rule 10b5-1 plan flagged, gifted 10,000 to a charitable fund, and held 1,489,106 shares afterwards.
against this
- The sale is 4.5% of a holding of 1,559,106 shares before it, about 8.8% of the company after - the largest individual stake on the register and not an exit.
- It is the only large open-market insider transaction in the year besides 22,847 shares sold by an officer and a director, and there was one open-market purchase, of 847 shares by a director in December 2025.
- A sale at a 252-day high five days after a 19.3% print is a fact about the price, not about the business.
C52facthigh confidence
Allient issues no revenue or earnings guidance; its FY2025 10-K's Outlook for 2026 states no figure.
C21facthigh confidence
Backlog was $298.0M at 30 June 2026, up 26% from $236.6M a year earlier and up from $232.9M at the end of 2025.
The betPriced for success
If it works
0.6×
from today's value, at the stated multiple
If it fails
keep 35%
of today's market value: the rest of the company, less its debt
How we read the multiple
Buyers pay about $43 for each dollar of yearly operating profit, counting debt. From 2016 to 2025 Allient kept between about 6 and 8 cents of operating profit on each dollar of sales.
To bring that down to $20 per dollar, ordinary for an industrial company, Allient must:
- Earn about $105M a year of operating profit.
- At June's 10.2% margin, sell about $1.03B a year.
- That is 79% more than the last twelve months, and 78% above its best year ever.
Against its own history. Dearer than its own normal on every measure, and by a wide margin. The business is better than it was, but not by nearly that much.
The evidence under this - 3 claims
C40estimatehigh confidence
At $116.01 the enterprise is worth about $2.10B against $48.5M of operating profit over the four quarters to 30 June 2026 - about $43 for each dollar. For that to be $20, operating profit must reach about $105M, which at Q2 2026's 10.2% operating margin needs roughly $1,031M of revenue, 79% above the last twelve months and 78% above the best year the company has ever sold.
derivedMarket capitalisation of $1,971.8M from the research pack's market tier at the 25 September 2026 close, plus net debt of $131.2M from the Q2 2026 balance sheet (C36), gives $2,103.0M. Operating income of $15,610K, $9,321K, $11,349K and $12,180K for the four quarters to 30 June 2026 (C27, C31) gives $48,460K. $2,103.0M over 20 is $105.1M; $105.1M at 10.2% is $1,031M; trailing revenue is $574.8M and the best full year was $578.6M in 2023 (C30). At the $98.66 the thesis was struck at the same arithmetic gave $1,808.1M, about $37 a dollar and $886M of revenue.
against this
- Trailing operating profit includes two weak quarters. On the Q2 2026 quarter annualised - $62.4M - the same enterprise value is about $34 for each dollar, and the backlog says the next two quarters should be larger still.
- $20 for each dollar of operating profit is a choice, not a law. A business genuinely compounding at a decade-high margin could reasonably hold a higher one, and Allient's own six-year median enterprise value to cash profit is about 13 times against 27 today - the re-rating has already happened once.
- The amortisation of acquired intangibles, $12.5M a year, is charged in this operating profit and added back in the company's own adjusted figures; excluding it the multiple falls to about $34 for each dollar.
- 2026-09-27editedre-struck on the 2026-09-25 close of $116.01 from the refreshed pack after a 17.6% rise since the price was struck; operating profit, net debt and the $20 reference are unchanged
C31facthigh confidence
Operating income was $44.0M in FY2025, 7.9% of revenue, against $30.0M and 5.7% in FY2024; across FY2016 to FY2025 the filer's own tags put every full-year operating margin between 5.7% and 7.9%.
sourceAllient Form 10-K for the year ended December 31, 2025primaryAllient company-concept data from the SEC XBRL API - diluted…primary
against this
- The research pack's vendor tier reports FY2025 operating income of $48.0M against the filed $44.0M, a 9.2% gap; the filed figure is used here and the divergence is recorded in the data notes.
- The ten-year window starts in 2016. Operating income in 2014 was $24.2M and the tag series carries no revenue figure that far back, so a higher margin before 2016 cannot be ruled out from these tags alone - which is why management's own 'highest in roughly a decade' is recorded separately as a claim.
C43facthigh confidence
The shares trade at 67.8 times trailing reported earnings against a six-year median of 30.6, at 3.4 times sales against 1.2, and at 26.7 times enterprise value to trailing cash profit against a median of 13.2.
- 2026-09-27editedre-struck on the refreshed pack's 2026-09-25 close: 57.7, 2.9 and 23.0 times at $98.66 are now 67.8, 3.4 and 26.7 times; the six-year medians are unchanged
Priced against its rivals
Only Regal Rexnord sells the same thing to the same buyers as a large part of what it does. Eaton, AMETEK and Parker-Hannifin do too, but as a small part of much bigger companies, so their price says little about this one. A price comparison needs at least two, so the price is judged against its own history instead.
Private or foreign rivals that cannot be priced: the rest of the field.
The bet: what it pays if it works
The bet is on Allient's filters for data centres, together with the drone motors and electronics it launches this October. Only management states the filters' sales, with no customer or contract named, and the drone parts have no orders, so the motor business is counted separately, at an ordinary price for an industrial company.
Even if the filters grow fast for three years and the drone parts sell, the shares end up worth about half of today. If both stall, shareholders keep the motors, about a third of today's value.
| Data centre power quality and drone products revenue in two to three years | Megawatts fitted needed | At the stated multiple |
|---|---|---|
| $120.00M | about 2.8K at 100% kept | 0.5× |
| $170.00M (the big win) | about 4.0K at 100% kept | 0.6× |
| $310.00M | about 7.5K at 100% kept | 0.7× |
To pay 2× (a Fair bet) it would need about $1.70B of Data centre power quality and drone products revenue (about 42.2K megawatts fitted); to pay 5× (a Cheap bet), about $4.89B of Data centre power quality and drone products revenue (about 122.0K megawatts fitted), at the same multiple.
Each row is Data centre power quality and drone products alone, plus the rest of the company (Controlled motion and distribution (the rest of Allient)) counted at about $854.00M.
The steps it has to take
- Done Data-centre and infrastructure sales above $57M over a year
- Done Record bookings, a book-to-bill of 1.31
- Not started Drone and counter-drone line launched at AUSA due 2026-10-31
- Not started A named data-centre customer, volume and term disclosed due 2027-03-31
- Not started A first drone order disclosed due 2027-06-30
- Not started Data-centre sales a fifth of revenue due 2028-12-31
The detail behind the label
Rating
Expensive
the big win's payoff against the 2× and 5× lines
Cheap bet at about
≈ $4.93
96% below the price (close, )
The option
0.3×
what Data centre power quality and drone products is worth if it works, against what the price pays for it
The evidence under this - 8 claims
C18management claimmedium confidence
Management says sales tied to data centre and infrastructure applications were $16.3M in Q2 2026, 10.6% of revenue and up 60% year on year, and $57.1M over the trailing twelve months, 9.9% of sales and up 69%.
against this
- The figure has no filed home. Allient reports one segment and splits revenue four ways; the data centre line appears in neither the 10-Q nor the 10-K, so it cannot be reconciled to anything audited.
- It was disclosed for the first time on this call, in the quarter it was strongest, and the chief financial officer had to look the growth rate up when an analyst asked him to repeat it.
- Industrial revenue as filed grew 16.8% in the quarter, so a 60% growth rate on a tenth of sales implies the rest of Industrial grew about 12% - consistent, but the split itself is unaudited.
C22facthigh confidence
Bookings were a record $201.3M in Q2 2026, up 49% year on year and 27% sequentially, a book-to-bill ratio of 1.31 times.
sourceAllient Form 10-Q for the quarter ended June 30, 2026primaryAllient second quarter fiscal 2026 earnings call transcriptprimary
against this
- Management changed how bookings are recorded during 2026, booking large blanket orders into backlog only when they fall within a year and are released to production, so the 49% is not struck against an identically defined base and the company did not restate.
- Management said on the same call that lead times have expanded and that customers are placing orders roughly three months earlier than before, which moves orders forward in time without adding demand.
- The FY2025 10-K says the company does not believe the amount of its backlog is a reliable indication of future sales.
C51management claimlow confidence
Management says its goal is to be one of the leaders in data centre power quality and that it would not be uncomfortable with a capture rate of 20%, 25% or 30%, while explicitly declining to forecast one.
against this
- Nothing filed or published sizes the market a capture rate would be taken of, and the same executive refused to give a forecast in the same breath - 'I don't want it coming back to me, that's what I told you it's going to be'.
- Eaton, whose own filing carries the same product line in two segments, is roughly forty times Allient's revenue; a 20% to 30% share of a market those companies serve is an aspiration with no evidence behind it.
C68estimatelow confidence
Taking data-centre and infrastructure sales of $57.1M at Q2 2026's 10.2% operating margin, about $5.8M of the $48.5M of trailing operating profit, the rest of Allient earns about $42.7M.
sourceAllient Form 10-Q for the quarter ended June 30, 2026primaryAllient second quarter fiscal 2026 earnings call transcriptprimary
against this
The data-centre line's margin is not disclosed; power-quality products may earn more or less than the company average.
C40estimatehigh confidence
At $116.01 the enterprise is worth about $2.10B against $48.5M of operating profit over the four quarters to 30 June 2026 - about $43 for each dollar. For that to be $20, operating profit must reach about $105M, which at Q2 2026's 10.2% operating margin needs roughly $1,031M of revenue, 79% above the last twelve months and 78% above the best year the company has ever sold.
derivedMarket capitalisation of $1,971.8M from the research pack's market tier at the 25 September 2026 close, plus net debt of $131.2M from the Q2 2026 balance sheet (C36), gives $2,103.0M. Operating income of $15,610K, $9,321K, $11,349K and $12,180K for the four quarters to 30 June 2026 (C27, C31) gives $48,460K. $2,103.0M over 20 is $105.1M; $105.1M at 10.2% is $1,031M; trailing revenue is $574.8M and the best full year was $578.6M in 2023 (C30). At the $98.66 the thesis was struck at the same arithmetic gave $1,808.1M, about $37 a dollar and $886M of revenue.
against this
- Trailing operating profit includes two weak quarters. On the Q2 2026 quarter annualised - $62.4M - the same enterprise value is about $34 for each dollar, and the backlog says the next two quarters should be larger still.
- $20 for each dollar of operating profit is a choice, not a law. A business genuinely compounding at a decade-high margin could reasonably hold a higher one, and Allient's own six-year median enterprise value to cash profit is about 13 times against 27 today - the re-rating has already happened once.
- The amortisation of acquired intangibles, $12.5M a year, is charged in this operating profit and added back in the company's own adjusted figures; excluding it the multiple falls to about $34 for each dollar.
- 2026-09-27editedre-struck on the 2026-09-25 close of $116.01 from the refreshed pack after a 17.6% rise since the price was struck; operating profit, net debt and the $20 reference are unchanged
C55management claimmedium confidence
Management will launch a drone and counter-drone product line, including off-the-shelf propulsion motors, electronics and composites, at the AUSA exhibition in October 2026; it has no disclosed orders and is not a material revenue driver today.
against this
- Management said itself that 'this is not a major revenue driver for us today', and no filing carries a drone revenue figure, an order or a customer.
- The same executive said 'there's a number of companies out there supplying these off-the-shelf products', which concedes the commodity end of the line is contested.
C70factmedium confidence
The Pentagon plans to buy more than 200,000 industry-made drones by 2027 through its Drone Dominance Program, placing about $1B of fixed-price orders over roughly two years.
C71estimatelow confidence
The bet counts about $10M a year of drone and counter-drone sales by 2028, a stated judgement: about 2% of the roughly $500M a year the Pentagon's drone programme alone plans to spend on finished drones.
sourceDefenseScoop, 2 December 2025: the Pentagon's Drone…secondaryAllient second quarter fiscal 2026 earnings call transcriptprimary
against this
- Management says the line is not a major revenue driver today and discloses no order (C55).
- The chief executive concedes that a number of companies already supply off-the-shelf drone propulsion products (C69).
Where we disagree with the market
The market believes
A small industrial whose margins have turned for good, with a fast-growing data-centre business behind it.
We believe
The margin gain is real but limited. The growth being paid for is a tenth of sales, unsigned, in a product bigger companies already sell.
The market is reading one quarter, and it has misread early orders before: in 2023 and 2024 the shares fell about 16% after results as they unwound. Across the filings the picture is slower: earnings per share rose 16.5% from 2018 to 2025, after adjusting for a share split.
What would prove us wrong is plain. If data-centre sales keep growing above 50% for four more quarters while the operating margin stays above 10%, the small part is becoming the company, and we were too cautious.
What analysts say, and the evidence
Analysts positive
80%
of 5, 1 Sep
Four months earlier
67%
of 6, 1 May
The evidence under this - 7 claims
C45facthigh confidence
The shares rose 19.3% in the session after the Q2 2026 results release of 5 August 2026.
C58facthigh confidence
The shares closed at $44.88 on 3 March 2023 and at $16.99 on 23 October 2024, 62% lower. The sessions after the Q2 2023 and Q2 2024 results closed 15.5% and 16.3% below the pre-release close.
C59management claimhigh confidence
On the Q2 2023 call the chief executive said two years of order intake had been 'somewhat inflated' by customers ordering early on long lead times, and that he saw no major drop-off coming.
against this
FY2023 revenue still rose 15.0% to $578.6M, so the unwind he described took a year to reach the income statement rather than showing in the quarter he described it.
C35facthigh confidence
Diluted earnings per share were $1.70 in 2018 as filed, $1.13 restated for the April 2021 3-for-2 split, and $1.32 in 2025 - a rise of 16.5% while net income rose 38.4%, from $15.9M to $22.0M.
sourceAllient company-concept data from the SEC XBRL API - diluted…primaryAllient (then Allied Motion Technologies) Form 10-K for the…primary
- 2026-10-04editedThe claim compared a pre-split 2018 figure with a post-split 2025 one; restated for the April 2021 3-for-2 split (S22) earnings per share rose 16.5%, not fell. Net income from the filed income statements added for scale.
C34estimatehigh confidence
Revenue per diluted share was $22.10 in 2018, on the split-restated count, and $33.14 in 2025 - a rise of 50.0%.
derivedRevenue of $310,611K over 14,055 thousand diluted shares in 2018 (9,370 thousand as filed, times 1.5 for the April 2021 3-for-2 split, S22), and $554,478K over 16,732 thousand in 2025 - both figures the filer's own XBRL tags (C33).
against this
- 2018 was a cyclical high and 2025 sits one year off a trough: revenue per share on the trailing twelve months to 30 June 2026 is about $34, so the rise is not smooth.
- Revenue per share flatters the record: diluted earnings per share rose only 16.5% over the same seven years (C35), and operating income per diluted share from $1.65 to $2.63 on the restated count.
- The $53.1M of shares issued for acquisitions and their contingent consideration from 2021 to 2024 (C66) bought businesses still in the company, so part of the revenue being divided is the thing the shares paid for.
- 2026-10-04edited2018 revenue per share was struck on the pre-split share count; restated for the April 2021 3-for-2 split (S22) it is $22.10, not $33.15, so revenue per share rose 50.0% rather than standing still.
C18management claimmedium confidence
Management says sales tied to data centre and infrastructure applications were $16.3M in Q2 2026, 10.6% of revenue and up 60% year on year, and $57.1M over the trailing twelve months, 9.9% of sales and up 69%.
against this
- The figure has no filed home. Allient reports one segment and splits revenue four ways; the data centre line appears in neither the 10-Q nor the 10-K, so it cannot be reconciled to anything audited.
- It was disclosed for the first time on this call, in the quarter it was strongest, and the chief financial officer had to look the growth rate up when an analyst asked him to repeat it.
- Industrial revenue as filed grew 16.8% in the quarter, so a 60% growth rate on a tenth of sales implies the rest of Industrial grew about 12% - consistent, but the split itself is unaudited.
C27facthigh confidence
Q2 2026 revenue was $153.8M, up 10.2% and 9.3% organically; gross margin was a record 34.9%; operating income was $15.6M, or 10.2% of revenue, against 8.4% a year earlier.
What could go wrong, and how we would know
The risks
- Orders pulled forward. Management says longer lead times brought orders early. It said much the same in 2023, and sales fell 8.4% the next year.
- Factories under tariffs. Plants in Mexico and China sit under live tariffs; the company expects to claim about $1.3M of refunds and has booked none.
- A shrinking car business. Vehicle sales fell from $133.5M in 2023 to $97.0M in 2025, and total sales in 2025 were below 2023's.
- The boss is selling. The chief executive sold 70,000 shares days after the results, with no pre-arranged plan on the form.
The evidence under this - 6 claims
C24management claimmedium confidence
Management says lead times have expanded and that it has encouraged customers to place orders earlier, so some orders are arriving about three months sooner than they would have before.
against this
- The chief executive volunteered it rather than being pressed, and bounded it himself - 'not to a great extent' - which is a management claim running against management's own interest and is therefore the more credible for it.
- He also said there was nothing in the quarter's orders outside the lead time he had described, and that order intake had continued strongly a month into Q3 2026.
C59management claimhigh confidence
On the Q2 2023 call the chief executive said two years of order intake had been 'somewhat inflated' by customers ordering early on long lead times, and that he saw no major drop-off coming.
against this
FY2023 revenue still rose 15.0% to $578.6M, so the unwind he described took a year to reach the income statement rather than showing in the quarter he described it.
C61facthigh confidence
Revenue fell 8.4% in FY2024 to $530.0M from $578.6M in FY2023, and was $554.5M in FY2025.
C56management claimmedium confidence
Management says it has submitted or expects to submit claims for approximately $1.3M of tariff refunds under the International Emergency Economic Powers Act, and has recorded no receivable for them.
against this
- No receivable has been recorded, which is the company saying it does not consider recovery probable - so the $1.3M is a claim submitted rather than money owed.
- The figure sizes refunds claimed, not tariff cost borne. Nothing filed says what tariffs actually cost Allient in the period, and the company describes mitigation through pricing, sourcing and strategic buys without quantifying any of it.
C30facthigh confidence
FY2025 revenue of $554.5M was below the $578.6M of 2023, and Vehicle revenue fell from $133.5M in 2023 to $97.0M in 2025.
C46facthigh confidence
Richard Warzala, chairman, president and chief executive, sold 70,000 shares on 10 August 2026 at $112.81 to $115.35 under transaction code S with no Rule 10b5-1 plan flagged, gifted 10,000 to a charitable fund, and held 1,489,106 shares afterwards.
against this
- The sale is 4.5% of a holding of 1,559,106 shares before it, about 8.8% of the company after - the largest individual stake on the register and not an exit.
- It is the only large open-market insider transaction in the year besides 22,847 shares sold by an officer and a director, and there was one open-market purchase, of 847 shares by a director in December 2025.
- A sale at a 252-day high five days after a 19.3% print is a fact about the price, not about the business.
What we still do not know
- What the power-filter business actually earns. It has no filed sales line, only a figure said on a call.
- Whether customers really stay: nobody, Allient or its rivals, discloses design wins, how long products run or renewal rates.
The evidence under this - 3 claims
C05facthigh confidence
Allient reports one reportable segment and discloses revenue only by target market and by geography, so no product line has a filed revenue figure of its own.
C18management claimmedium confidence
Management says sales tied to data centre and infrastructure applications were $16.3M in Q2 2026, 10.6% of revenue and up 60% year on year, and $57.1M over the trailing twelve months, 9.9% of sales and up 69%.
against this
- The figure has no filed home. Allient reports one segment and splits revenue four ways; the data centre line appears in neither the 10-Q nor the 10-K, so it cannot be reconciled to anything audited.
- It was disclosed for the first time on this call, in the quarter it was strongest, and the chief financial officer had to look the growth rate up when an analyst asked him to repeat it.
- Industrial revenue as filed grew 16.8% in the quarter, so a 60% growth rate on a tenth of sales implies the rest of Industrial grew about 12% - consistent, but the split itself is unaudited.
C09estimatemedium confidence
Return on invested capital over the four quarters to 30 June 2026 was about 8.6%: $48.5M of operating profit taxed at 21% over $443.5M of equity plus debt less cash.
derivedOperating income of $15,610K, $9,321K, $11,349K and $12,180K for the four quarters to 30 June 2026 from the Q2 2026 10-Q and the FY2025 10-K; stockholders' equity $312,294K, total debt $173,337K and cash $42,088K at 30 June 2026; a 21% rate, the bottom of the company's own 21% to 23% full-year expectation. The research pack's own trailing figure, computed differently, is 7.5%.
against this
- It is struck on a capital base carrying $214.6M of goodwill and other intangibles at cost less amortisation, so it charges the company for acquisitions made at prices set years ago; on tangible capital alone the return is far higher.
- It uses trailing profit at the bottom of a margin recovery. On the Q2 2026 quarter annualised the same calculation gives about 11%.
What would change our view
- Unattractive→AttractiveThe data-centre share becomes real, at an industrial's multiple
It needs all of:
- ○Data-centre sales pass a fifth of revenue while operating profit stays above 10 cents in each sales dollar.checked at the next results, due by 4 Nov
- ○The business is valued at about 20 times its yearly operating profit, down from about 43.about ≈$53.46 today, 54% below the last close
- Reopens the researchThe data-centre claim becomes checkable
It needs:
- ○Allient discloses signed data-centre volume with a named customer and a stated length.checked at the next results, due by 4 Nov
We would also be wrong if
- Sales grow more than 10% for four quarters in a row with nothing bought.
- Gross margin holds at 34% or better for a full financial year.
- Return on the money invested reaches 15%.
What is coming
- October 2026 Drone and counter-drone line launched at the AUSA exhibition: Whether the Defense unit names a customer or an order, or the line stays an off-the-shelf product in a crowded field.
Every dated event ahead
- October 2026 Drone and counter-drone line launched at the AUSA exhibition: Whether the Defense unit names a customer or an order, or the line stays an off-the-shelf product in a crowded field.
- 4 November 2026 Q3 2026 results: Whether the $298M backlog converts at an operating margin above 10% and the cash follows, or the lead-time orders unwind as they did in 2023 and 2024.
- March 2027 Q4 2026 results and the FY2026 10-K: Whether full-year operating margin breaks above the 7.9% ceiling of the last decade, and whether the 10-K finally files a data-centre revenue figure.
- April 2027 2027 proxy statement: How far the revenue-growth XSIP has paid toward its 2027 target, and whether succession for a combined chairman and chief executive in his seventies is addressed.
Since we wrote this
Written
12 Sep
Price the thesis read
$116.01
25 Sep
- 11 OctThesis reviewThe data-centre line declared early and priced as a betThe owner's rule of 2026-10-11: every thesis names the lines its story rides, and an early line owes a bet that cannot be declined.
- 11 OctThesis reviewThe bet now covers the drone parts as well as the filtersA thesis carries one bet, so the owner asked that its early lines be folded into one business and priced together.
- 5 OctThesis reviewThe long case now sits under the verdictAfter the five-name pilot, the owner asked for the long case on every thesis.
- 4 OctThesis reviewOwner's checklist; share count corrected for a 2021 splitThe owner's checklist asked who runs Allient, what growth costs, where the money comes from and what is ahead; reading old annual reports for it found the 2018 share count was pre-split.
- 29 SepThesis reviewLead-time orders unwound twice before. View heldIn 2023 and 2024 orders placed early on long lead times unwound, the shares fell about 16% after results and sales then fell. Management gives the same explanation for today's record order book.
- 27 SepPrice moveShares up 18%; ordinary price now needs 79% more salesThe price rose to $116.01 with nothing new from the company. Each dollar of yearly operating profit now costs about $43, so reaching an ordinary industrial's $20 needs sales well above anything Allient has sold.
- 26 SepThesis reviewSales figure in the header given its period. View heldThe $574.8M in the summary is sales over the four quarters to June 2026; the $554.5M in the claims is fiscal 2025. Both were right, and only the label was missing.
- 12 SepThesis writtenUnattractive, medium convictionWritten five weeks after the June-quarter results lifted the shares 19.3%, taking their one-year rise to 116%.
Also checked 2 times with nothing new to act on.
Sources 26
Where this came from
Sources - 26
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-03-05Item 1 in full - the product list, the four target markets, the Competitive Environment paragraph naming Ametek, Parker Hannifin and Regal Rexnord, the backlog and bookings figures, the customer concentration note, the revenue disaggregation by target market for 2023-2025, the single-reportable-segment statement, goodwill at 23% of assets, adjusted EBITDA, and the diluted share count for 2023-2025backsC01C02C04C05C06C07C10C21C23C30C31C36C47C50C52C61C66C67
- S02primarycompany filing2026-08-05the quarter's and the half's statements, the balance sheet, the cash-flow summary, the revenue disaggregation by target market, the bookings and backlog line, the non-GAAP reconciliations, the debt and covenant note, the maturity dates and the tax-rate and capital-spending expectationsbacksC01C08C21C22C27C28C29C36C37C38C39C49C54C62C67C68
- S03primarytranscript2026-08-06Allient second quarter fiscal 2026 earnings call transcriptthe first disclosure of data centre revenue in and out of the quarter, the content-per-megawatt range, the Simplify to Accelerate NOW savings history and runway, the lead-time and order-timing answer, the bookings-recognition change, the book-and-ship share of a quarter, the leverage ratios, the IEEE 519 framing, and twenty-four analyst turns from five analysts
In the second quarter, sales tied to data center and infrastructure applications were $16.3 million or 10.6% of total revenue, up 60% from the prior year period. On a trailing 12-month basis, sales were $57.1 million or 9.9% of total sales, up 69% year-over-year. [...] if it's just simply a line reactor, we might be talking about a couple of thousand dollars per megawatt. When it gets into a more complete solution, which we offer, including communications gateways, filters and reactors [...] Now we're over $40,000 per megawatt.
backsC03C17C18C22C24C25C26C32C37C51C53C54C55C56C68C69C71 - S04primaryvendor data2026-09-27Research pack for ALNT, frozen at content/ALNT/research-pack.jsonprice, market capitalisation, the 252-day return and range, the trailing multiples against their six-year medians, the analyst split and estimates, FINRA short interest, the measured price reaction to the Q2 release, and the filed competitor cohort's verdictbacksC41C42C43C45C47C48C50
- S05primarycompany filing2026-09-12the sixteen-year series behind the per-share pass - the filer's own tags rather than a vendor's copy of thembacksC31C33C35C61
- S06primarycompany filing2026-08-12the transaction codes, the four sale blocks and their price ranges, the charitable gift, the holding afterwards, and the Rule 10b5-1 flag set to zerobacksC46
- S07primaryindustry data2022-08-04IEEE 519-2022, IEEE Standard for Harmonic Control in Electric Power Systems IEEE Standards Associationthe specification that makes the product a requirement rather than a preference, written by a standards body rather than by a vendor
This standard establishes goals for the design of electrical systems that include both linear and nonlinear loads. The interface between sources and loads is described as the point of common coupling (PCC). The voltage and current distortion steady-state limits in this standard apply at the user PCC to facilities containing harmonic producing loads (nonlinear equipment).
backsC03 - S08primaryregulator2026-04-01the only quantity of prospective data centre load published by the party that has to connect it, and its own caveat that this is a queue rather than a build
ERCOT is tracking approximately 410 GW of Large Loads seeking interconnection of which ~87% are data centers.
backsC16 - S09primarygovernment data2026-01-13EIA press release - EIA forecasts strongest four-year growth in U.S. electricity demand since 2000, fueled by data centers U.S. Energy Information Administrationthe driver stated as a rate by the agency that measures it rather than by the industry that sells into it
EIA expects U.S. electricity use to grow by 1% this year and 3% in 2027. This increase would mark the first time since 2007 that power demand has risen for four years in a row and the strongest four-year growth period since 2000. The driving factor behind this surge is increasing demand from large computing centers.
backsC20 - S10primarygovernment data2026-03-12EIA Today in Energy - Fossil generation could rise with faster-than-expected growth in data center power demand U.S. Energy Information Administrationthe load-growth figures behind the driver, and the regional split showing where the growth actually sits
In our February STEO, we forecast that U.S. electricity load will increase by 1.9% in 2026 and 2.5% in 2027.
backsC19 - S11primarycompany filing2026-02-26that 'three phase power quality' is a named product line inside both Electrical Americas and Electrical Global - the competitor for Allient's data centre business, written by the competitorbacksC11C50
- S12primarycompany filing2026-02-20the Automation & Motion Control segment description and its 2025 net sales and gross profit, and Regal Rexnord's own statement that the markets for that segment are highly fragmentedbacksC08C12C50
- S13primarycompany filing2026-02-17the Electromechanical Group description, the five product families inside it, the 30% aerospace share of that group, and the 2025 acquisition of a motion-control businessbacksC13C50
- S14primarycompany filing2026-08-21the Diversified Industrial product list carrying electric motors, electromechanical actuators and drives and controllers, the segment's 67% share of $21.5B of net sales, and Parker's own statement that no single competitor competes with it across its marketsbacksC14C50
- S15primarycompany release2026-08-05Allient second quarter 2026 results release, distributed by Business Wirethe release itself, which Allient does not file as an 8-K exhibit - read through news_digest, with every figure taken from the 10-Q insteadbacksC45
- S16primarycompany filing2026-03-05TCI, LLC and SNC Manufacturing Co., Inc., both Wisconsin, the entities behind the power-quality and transformer linebacksC02
- S17primaryregulator2026-09-01Electronic Code of Federal Regulations, 21 CFR 807.81 - when a premarket notification submission is required U.S. Food and Drug Administrationthe rule that makes a component change in a cleared medical device a regulatory event: a new 510(k), filed at least 90 days before the changed device ships, where the change could significantly affect safety or effectiveness
must submit a premarket notification submission to the Food and Drug Administration at least 90 days before he proposes to begin the introduction or delivery for introduction into interstate commerce [...] about to be significantly changed or modified in design, components, method of manufacture, or intended use
backsC57 - S18primaryregulator2026-07-30FDA notice - Medical Device User Fee Rates for Fiscal Year 2027, Federal Register 2026-15335, read at govinfo.gov U.S. Food and Drug Administrationthe fee for a 510(k) in the fiscal year that starts 1 October 2026: $28,653 standard, $7,163 for a small business. federalregister.gov served a bot-check page; govinfo.gov served the same notice
510(k) Premarket Notification Submission....... 4.5%........................... 28,653 7,163
backsC57 - S19primarytranscript2023-08-03Allient second quarter fiscal 2023 earnings call transcript, held 3 August 2023the chief executive's account of order intake inflated by early ordering on long lead times, and his statement that he saw no major drop-off coming
we were certainly well prepared that the order intake over the last couple of years here was somewhat inflated
backsC59 - S20primarytranscript2024-08-08Allient second quarter fiscal 2024 earnings call transcript, held 8 August 2024the chief executive's account of June 2024 demand falling away as key customers stopped ordering to rebuild stock, and a run rate near $500M a year expected into early 2025
it was go, go, go, go, go, ship, ship, ship everything you've got and then all of a sudden hold on
backsC60 - S21primaryvendor data2026-09-29FMP daily closing prices for ALNT, September 2019 to 28 September 2026 (historical-price-eod/full), read against FMP's earnings datesthe 2023 high and 2024 low, and the close in the session after each results release since 2019backsC58
- S22primarycompany filing2021-03-10the 3-for-2 stock split approved on 10 March 2021 and paid on 30 April 2021 (subsequent-event note), and diluted shares and earnings per share for 2018 to 2020 as filed before itbacksC33C35
- S23primarycompany filing2026-03-26beneficial ownership at 11 March 2026, the executive officers and their tenure, the CD&A - the EVA bonus, the EBITDA performance shares, the revenue-growth XSIP and their 2025 outcomes - the summary compensation table and the family relationship between the chief executive and the chief growth officerbacksC63C64C65
- S24primarycompany filing2023-03-07the income statement's selling, general and administrative and engineering and development lines for 2020 to 2022, cash paid and stock issued for acquisitions, debt and dividends in the 2020 to 2022 cash flow statementsbacksC66C67
- S25primarycompany filing2026-10-04revenue, gross profit, operating income, selling and marketing, general and administrative, stock pay, capital spending and long-term debt per year, from which the cost shares per sales dollar are struckbacksC66C67
- S26secondarynews2025-12-02the size and pace of the Pentagon's own small-drone purchases, the market the drone line sells parts into
The Pentagon plans to purchase more than 200,000 industry-made drones by 2027 [...] The Pentagon aims to place $1 billion in fixed-price orders through the program
backsC70C71